SSTI Digest

The U.S. venture capital (VC) industry continued a gradual deflation in activity in Q1 2016, even as capital invested remained at a historically robust level according to Pitchbook’s 1Q 2016 U.S. Venture Industry Report. In Q1 2016, the VC industry also continued the trend of massive late-stage VC rounds with $9.4 billion of $17.7 billion invested in late-stage financing. While VC activities declined in Q1, angel and seed capital deals continued to plateau for another quarter. In its recently released 2015 Annual VC Valuations & Trends Report, Pitchbook researchers projected that the VC industry has peaked and VC activity will slowly return to 2013 levels and its 2016 Q1 report may confirm that assertion over the next couple years. Pitchbook researchers contend that the decline in VC valuations/deals and the plateau in angel/seed financing activity is clear evidence that investors at all levels are exercising a bit more caution in their investments. However, they highlight that both VC and angel investors are still willing to make investments in startups, which are viewed as low-risk, due to the significant size of many late-stage investments. 

To drive state competitiveness and job creation, Indiana and Mississippi announced new efforts to engage regional institutions of higher education and other organizations to provide workers with the skills that match the needs of existing industry as well as attract new business and industry to their state. Through the Indiana Department of Workforce Development (DWD), the state will commit $22 million to fund industry-led regional partnerships aimed at aligning education and workforce needs. Mississippi Gov. Phil Bryant announced the creation of a new workforce training fund to allow state leaders to allocate dollars toward workforce training with a focus on recruiting new business to the state.  Indiana Over the last two months, the state announced the winners of the first round of Skill UP Indiana! and is now accepting applications for the second round of the program. Via these two rounds of funding, the state will commit up to $22 million to encourage the development of sector-focused training and education programs for in-demand occupations as well as teach necessary workforce skills and competencies as identified by local employers. In the first…

Many states across the country already have, or will soon have, signed budgets ready for the 2017 fiscal year.  Over the past few months, SSTI has examined gubernatorial addresses and proposed budgets for a preview of technology-based economic development spending in the coming year. This week, we take a look at what initiatives and spending levels survived spending negotiations in New York, South Dakota, Wyoming. New YorkGov. Andrew Cuomo and New York legislators reached an agreement on fiscal year 2017 spending late last week. The resulting budget includes a new $15 minimum wage, paid family leave, a $4.2 billion middle class tax cut and $55 billion in transportation infrastructure spending. The approved legislation provides $20.1 million in general funds for operations at the Department of Economic Development, with another $54.5 million in aid to localities.  Of this aid, $43.3 million will support the High Technology Program, which funds a number of centers of excellence around the state.  The Industrial Technology Extension Service is allocated $921,000 in general funds, while the Training and Business Assistance Program will receive $9.…

Last week, the Department of Defense announced the launch of the eighth institute in the National Network of Manufacturing and Innovation (NNMI) in Cambridge, MA. The Massachusetts Institute of Technology will spearhead the consortium of 89 manufacturers, universities and nonprofits to develop new technologies around fiber and textiles manufacturing. Alongside the launch, the White House released a new report highlighting the administration’s advanced manufacturing priorities and how federal funding is being used to support strategic technologies. The National Science and Technology Council estimates that the administration has invested $2.1 billion in these priorities since 2011, including proposed fiscal year 2017 spending. Read the announcement…

Startup accelerators, which began emerging in 2005 with the launch of Y-Combinator, generally share three characteristics: they tend to be limited in duration; work with cohorts of early stage entrepreneurs; and, aim to facilitate connections with potential investors. In July 2015, the Aspen Network of Development Entrepreneurs (ANDE) and Emory University’s Social Enterprise @ Goizueta (SE@G) program announced the launch of the Global Accelerator Learning Initiative (GALI), a $2.3 million effort aimed toward assessing and analyzing the impacts of these accelerators. In collaboration with Village Capital, GALI released its first report last month, focusing on the effectiveness of accelerator programs, best practices in the space, and estimated impacts. Ultimately, the authors find support that the quality of partners and applicants has a positive impact on accelerator performance, while there is limited support that mentor quality or cohort networking played as strong a role. To assess the impacts of accelerator programs, the authors of the report, which includes ANDE and Emory University researchers as well as Village Capital managers, use application and follow-up…

As the water crisis in Flint, MI, continues to capture headlines, details on potential relief efforts are beginning to emerge. In January, President Obama granted $5 million in emergency funding to address the crisis, while the state has approved $67 million in funding since October. To provide for more immediate relief efforts, The FlintNOW Foundation, created by Flint-native Tom Gores, Chairman and CEO of Platinum Equity and the owner of the Detroit Pistons, seeks to deliver private sector support in the wake of the crisis. FlintNOW announced late last month that Ohio-based Huntington Bank would help to support the foundation’s mission for comprehensive economic development programming in the region, providing $25 million to support businesses, entrepreneurs, and residents. Originally seeded with $10 million from Gores, FlintNOW focuses on three core priorities: Immediate support for short-term relief efforts to ensure access to safe drinking water and infrastructure associated with volunteer programs, distribution of resources and other logistics; Funding for programs that help children, including healthy food and nutrition campaigns, education, and…

Although they represent a small proportion of the total number of institutions in the U.S. higher education system, the impact of public research universities is profound and widespread, according to a recently released report from the American Academy of Arts and Sciences (The Academy). The report, which is divided in three sections, provides insight into how public research universities act as centers of discovery, drive economic development and social wellbeing, and serve their communities. Public Research Universities: Serving the Public Good is the fourth of five publications from The Lincoln Project, an initiative of The Academy focused on studying the importance of public research universities, analyzing economic trends affecting their operation, and recommending new strategies to sustain and strengthen them. With an advisory group comprised of notable business, political, and academic leaders and financial support from five foundational partners, the research papers developed by The Lincoln Project: Present key facts about public research universities; Examine the challenges facing higher education funding at the state level; Discuss current and changing…

New Canadian Prime Minister Justin Trudeau released his administration’s 2016 proposed budget last week which, if passed, would allocate significant funds to scientific research and technology-based economic development. Throughout 2016 and 2017, the Canadian government will continue to develop an Innovation Agenda that fully describes their intentions, though the goal of developing an innovative and clean economy is one of the key pillars of the proposed budget. In total, C$2.3 billion (1.8 billion USD) would go toward strengthening science and research, while an additional C$334 million (257.2 million USD) would help to support business growth and innovation. While the Innovation Agenda has yet to be released, the proposed 2016 budget includes several interim proposals to promote research and accelerate economic growth. Examples of proposed investments in research, as noted by The Scientist and The Globe and Mail, include: C$237.2 million (182.6 million USD) in new funding to Genome Canada, to boost Canada’s leadership in genomics research; C$197.1 million (151.8 million USD) over five years to Fisheries and Oceans Canada for scientific research; C$130…

What leading indicators allow a national, state, regional, or local economy to rebound from an exogenous shock (e.g., economic downturn or natural disaster)? What risk factors are common among economies that were not resilient to an exogenous shock? The academic literature defines resilient economies as economies that are able to absorb an exogenous shock with limited negative impact on economic prosperity and their workforce. Several recent studies have identified leading indicators of economic resiliency include age of workforce, diversification of industries, and other key factors. Researchers also have found several risk factors that place economies at high risk of instability in the face of an exogenous shock including household and public fiscal solvency. In recent studies, the authors identify the importance of governance and local institutions as the key to improving and sustain economic resiliency in the face of exogenous shocks – economic, man-made, and natural. The authors of Local growth evolutions: recession, resilience and recovery emphasize the importance of developing proactive rather than simply reactive policy responses. These…

NASA is accepting applications for the Space Race Competition – a startup accelerator challenge that allows startups to license patented NASA technologies without any up-front costs and no minimum fees for up to three years. In partnership with the Center for Advancing Innovation (CAI), NASA will allow potential startup teams to choose one of 10 specially selected NASA technologies and develop a plan to commercialize it. Winners of the four-stage challenge will be enrolled in a business accelerator program that provides training in business fundamentals and access to mentorship from industry experts as well as prizes of $2,500 each. In addition to the $2,500 prizes, awardees have the opportunity to raise as much as $1.2 million seed funding from an unnamed, committed private investment fund. Applications are due May 1, 2016. More information is available at: http://technology.nasa.gov/spacerace. The Space Race competition is part of a larger effort launched by NASA in October of 2015. The Startup NASA initiative is intended to make it easier for startups to commercialize NASA technologies, create well-paying jobs, and support economic prosperity. The intent of the…

The National Institute of Standards and Technology’s (NIST) Manufacturing Extension Partnership (MEP) intends to publish a federal funding opportunity (FFO) in July 2016 for MEP Centers in the 11 states: Delaware, Hawaii, Iowa, Kansas, Maine, Mississippi, New Mexico, Nevada, North Dakota, South Carolina and Wyoming. The objective of the MEP Center program is to provide business and technical services to small- and medium-sized manufacturers within the state of operation. U.S.-based nonprofit institutions or organizations, including existing MEP centers, are eligible to participate in the competition.  The cooperative agreements have a five-year period of performance with the opportunity to receive another five years of funding based on successful performance and availability of funds. Prior to the release of the FFO, MEP will conduct three regional forums to provide interested entities more information about the MEP program, the state competition, answer any questions regarding this funding announcement and also offer potential applicants the chance to sign up for a one-on-one meeting with NIST MEP representatives. The three regional forms include:…

North Dakota led the country in per capita personal income gains between 2010-2015, according to data released by the Bureau of Economic Analysis (BEA). While average (mean) incomes rose 18.4 percent around the U.S. during that time, North Dakota incomes rose by 26.8 percent from $42,964 in 2010 to $54,376 in 2015. Changes in mean income can obscure discrepancies between demographic groups and concentration of wealth, but demonstrate some of the key economic trends of the last few years. For example, oil, coal and natural gas rich states, including North Dakota, experienced strong income growth in the early part of the decade, which has since leveled off or reversed. Meanwhile, income growth has begun to shift to states with a stronger foothold in healthcare and professional services, as well as the West and Southeast. For the U.S. as a whole, per capita personal income rose from $40,277 in 2010 to $47,669 in 2015. California, Wyoming, Oklahoma, and Arkansas ranked alongside North Dakota in personal income growth during that period, with growth levels ranging from 22 percent to 24 percent. Despite meager growth over the five-year data, the District of Columbia continues…